Extended-stay hotels set more than a dozen new performance records in the fourth quarter of 2021, according to the latest report from The Highland Group, a consultancy. Supply and demand reached new highs for all segments. Economy and mid-price segments also posted record high occupancy, average daily rate (ADR) and revenue per available room (RevPAR) for the fourth quarter. Mark Skinner, partner at the Highland Group, said comparisons with 2021 data will make new performance records harder to achieve in 2022 than in 2021, which was compared with 2020. However, with supply growth the lowest in nine years and recent demand gains five times greater than supply, “the near-term outlook is very strong.”

Occupancy at extended-stay hotels in the fourth quarter of 2021 was 72.8%, one of the highest fourth-quarter values ever reported and almost 15 percentage points higher than the 57.9% STR reported for the overall hotel industry. The bottom-up recovery continues, with economy and mid-price extended-stay hotels posting record fourth-quarter ADR and RevPAR. The recovery rate for upscale extended stay is gaining across most metrics. That segment’s occupancy and ADR remain 4 to 5 percentage points off previous high levels but should pick up in the near term, according to The Highland Group, as the fourth-quarter demand change was six times the corresponding change in supply. Only the upscale segment has ADR below its fourth-quarter value in 2019. Extended-stay hotel RevPAR in the fourth quarter overall was about 2% higher than its 2019 peak. Upscale extended-stay hotels are lagging, with fourth-quarter RevPAR about 10% lower than in 2019. One of the main reasons for this is the relatively high concentration of upscale extended-stay rooms in the urban sub-markets of gateway cities.